A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.

March 29, 2008

The Federal Reserve was supposed to regulate the lending industry and didn't. Maybe that was the plan - offload the responsibility, and then let the banks run ramshod. So instead of proposing legislation to disband or rein in the Fed, George Bush and Goldman Sachs CEO Hank Paulson (oops, I mean Treasury Secretary Paulson) want to give them more responsibilities (whether they choose to use them, or ignore them like they did in the past).

Here's the plan that SHOULD be being proposed:

DISBAND THE FEDERAL RESERVE BANK. BRING THE POWER TO REGULATE THE FINANCIAL INDUSTRY IN-HOUSE. STOP ALLOWING AN UNREGULATED AND UNCHECKED ORGANIZATION TO RUN THE FINANCIAL AFFAIRS OF THE UNITED STATES (INTO THE GROUND)

Be afraid America, be very afraid. Fear for your country, because your countrymen either don't understand or could care less.The Federal Reserve Bank and its leaders have failed America and were directly responsible for creating this current mess. The blood of the housing bubble and crash is on their hands. They should be destroyed, not deployed.

Ron Paul is going to go nuts when he hears about this.

WASHINGTON - The Bush administration is proposing a sweeping overhaul of the way the government regulates the nation's financial services industry from banks and securities firms to mortgage brokers and insurance companies.

The plan would give major new powers to the Federal Reserve, according to a 22-page executive summary obtained by The Associated Press.

The Fed would be given broad authority to oversee financial market stability. That would include new powers to examine the books of any institution deemed to represent a potential threat to the proper functioning of the overall financial system.

Hahahaha .... this is about as big as news gets and the house of zion conveniently decides to release this information late on a Friday. I bet something happens over the weekend forcing this off the front page next week.

The institution that caused all the financial turmoil that we're seeing is now guarding the hen house. You can't make this up. Anybody who believes that this wasn't planned is delirious.

Poltergeist a more accurate title? ANYTHING, even the destructive philosophy this film so enjoys, may be proved to the disgusting depths of lunatic conspiracy and barbaric provocation when the magic of loose association, random assertion, and ethical relativism is so employed.

There's no [mainstream] news coverage on it yet so this qualifies as a serious heads up.

Note the second numeric column. $40 Billion, has been since 1913, by law. Then notice it suddenly dropped to minus $61 billion, something which has never happened before.

How bad is it?

Think Weimar Republic. The Fed can no longer stop inflation because the banks can't secure new money with debt. People aren't buying debt anymore. Ergo, hyperinflation is the natural consequence. (NOT deflation like you believe.)

Mark this day on your calendar.

Because this Federal Reserve chart, showing that the Net Free or Borrowed Reserves (NFORBRES) of Depository Institutions just fell off a cliff. Let's pray that there aren't any bank runs soon, because the till is empty.

I have a feeling that this was the plan all along...Create a financial crisis by over extending credit then the administration comes in an "cleans" up with supposed regulation. As most people don't know, understand (or care) that the Federal Reserve is not a government agency but an unregulated private financial institution, this actually sounds like a responsible proposal. The FED should be dismantled and I really wonder if the whole Bear Stearns deal was not an inside job...

The Fed is responsible for the housing bubble? Uh, try the Democrats you tool! Do you know where the sub-prime lending market came from? It came from stupid leftist libbies demanding the people with poor credit be given access to loans. As a result people started living far above their means. When housing prices went down, something NO ONE CONTROLS these people were left facing a mortgage that was worth more than the house they owned.

The fact is that the left acted irresponsibly. The fact is that the home owners acted irresponsibly. The fact is the now the left want's the government to swoop in an bail out all the home owners which once again destroys any sense of personal responsibility.

That said, this idea to grant the Fed more oversight is a horrid idea. We need less government control, not more. 10 times 10 times 10 times 10, every time an industry becomes deregulated competition increases, prices drop and product value increases.

Keith, if you and the other Christian bashers on this blog spent a little time studying bible prophecy, you'd soon understand that this is part of the plan to merge governments into regional powers, and then merge those regional powers into a one world power just before the end comes. Just Google bible prophecy and yes, there are a lot of kook sites, but no more than you'll find Googling anything else.

"Be afraid America, be very afraid. Fear for your country, because your countrymen either don't understand or could care less."

Yet you post every day wishing for the entire economy to collapse. You know what is going to happen then? Its going to spill over into racial violence, spiral into anarchy, civil war, death of our nation.

and you people think your going to be safe and get a loan to buy a house at 1980s prices during a civil war.

Only the tinfoilists think that it's secretly being run by the Rothchilds and other Jewish bankers or whatever.

In reality, it is being run overtly by the same power people who run the people who run the US government.

1) The US government appoints all senior managers to the Federal Reserve, and are confirmed by Congress

2) The US Congress enacts legislation to define the Fed's powers

3) The Fed turns over all excess interest it earns on owned securities to to the U.S. Treasury. It pays dividends to nobody else.

In managerial and economic relationships, in reality---not some paperwork---the Fed is part of the US government, period.

Do you know where the sub-prime lending market came from? It came from stupid leftist libbies demanding the people with poor credit be given access to loans.

Bullshit. You're talking about the FHA, which is *full* *doc*. The "leftist libbies" actually were against predatory lending, which is what a bunch of the subprime market is.

The subprime market which blew up came entirely from capitalist greed. The profit margins were very, very high. (As long as somebody else can be fooled to buy the toxic waste.)

The FHA is still there.

Less government control? We had none. None on securitization. None on capital ratios, honesty and solvency of teh banking system.

This was precisely a failure, intentionally for ideological reasons, flowing from Alan Greenspan, to give up on traditional prudent lending standards and regulations which had worked just fine for 60-70 years.

All because private sector was, temporarily, making enormous amounts of money.

RE: The takeover of all aspects of the United States financial system by the Federal Reserve...

I have finally found a capsule summary of why the current Fed policy of lowering interest rates will be a worthless endeavor:

"Consider the point of view of the lender: I can borrow from the Fed at low rates, which is nice, but where can I extend new credit without risking losses? Housing? You've got to be kidding. Consumer credit and auto loans as the country slides into recession? Forget it."

"Now that pension funds, insurance companies and non-U.S. institutions are suffering stupendous losses on the U.S. debt they purchased in the past, then I can't sell new debt. That tunnel is now a pinhole."

"In other words, the supply of actual available credit has shrunk, regardless of what the Fed does with its Fed Funds Rate and Discount Window. That means the cost of credit is rising."

The supply of available credit has shrunk and will continue to shrink because there is no market for debt backed by worthless collateral.

Just as there is nothing backing Federal Reserve fiat currency, there will be nothing backing Federal Reserve debt. The dollar will become totally worthless.

Runaway inflation will be the result of ever increasing interest rates on the existing national debt plus the ever increasing debt required to finance current and future wars.

When Medicare, Social Security and other entitlements are added to the debt load, it becomes obvious that the United States is bankrupt.

Will the ultimate collapse of the United States economy be a long, drawn out affair or an abrupt crash. Only time will tell.

I got 1 trillion american dolla in pocket. I open my own bank in you country. I put Bank of China near every Chinese restaurant and you bank there like fat american eat my fried rice. I buy Federal Reserve, not part of government and if it was I could still buy it. Good bye fat ass-- got to bitch slap some Monks. Wok Da Fok!

I got 1 trillion american dolla in pocket. I open my own bank in you country. I put Bank of China near every Chinese restaurant and you bank there like fat american eat my fried rice. I buy Federal Reserve, not part of government and if it was I could still buy it. Good bye fat ass-- got to bitch slap some Monks. Wok Da Fok!

buzzsaw aka "edgar" calm down. edgar just because they looted everything doesn't mean that they will keep it.those morons have the IQ of a god dam squirrel, they see billions i see trillions etc. if you foreclose or steal a bakery no one eats, future revenue is lost, and you can't open a new bakery. take this exercise in cliff notes credit dynamics and you should understand me. And remember they are always one contract a way from being thrown in the crematorium or in a ditch. my man nothing is free there is a cost to play this game. they seem to enjoy playing with their lives. i guarantee if they take your loot or prevent you from making loot i will not be the only one looking for street justice. theres got to be a line drawn here they should not be allowed to control the federal reserve bank in this manner. fuck it just revolt in the streets in front of your home, the villagers will meet at noon, i will build the wood shed lol

Thanks for the forum you provide.What went down with Bear Stearns only confirms the beliefs of the kooks and the crazies re: a skull and bonesmen conspiracy at the highest levels and a shadow government etc. This doesn't mean that I don't think that there is a unifying operator among the events - just that I think the great unifier is GREED.

Please give me some feedback because I have seen this nowhere on a monitor yet: I think that the Federal Reserve (not a part of the government - its name is just like Federal Express - it is a private "family" company) has finally overstepped and been too clever by half.

Let's face facts they have never lived up to their "public" mandate, their failures are legion, and now with this shotgun marriage between Bear and JP (and the upcoming nuptials featuring ugly brides Lehman and Citi and distant cousin WaMu) they are guaranteeing what the market has labeled garbage.

Well guess what, their "public" mandate is at the discretion of congress - so some new congressmen and women with spines could, in reality, revoke their charter.

Afterall would you want to do business with or trust the right to coin your money to a private entity that is bankrupt as a result of the waste products they've just underwritten?

They are private so the onus is on them prove that the Federal Reserve is not BANKRUPT by opening their books - something that they have been historically opposed to and now thanks to their recent actions something that they will be unable to prove.

The only thing these guys (and they are predominantly men) hate more than a penny missed is sunlight - so shine on you crazy diamond!

No matter what happens, America will still be that shining city on top of a hill that the whole world envies. No matter what happens, those idiotic Asians will continue to buy our debt and we will consume and they will produce. It is as easy as that.

Sounds like we have a motive for the Bush Administration intentionally ignoring the housing bubble and bad lending practices. This has been the plan all along - bring the economy to it's knees and then give the elite even more control.

Man, you people really are possessed in your hate for Christians. I don't know what getting a loan had anything to do with the Christian posting earlier either.

Well, that's ok, they have salvation, but those those you who say these blasphemous things and reject Christ will have an eternity to dwell on your stupidity. Just remember that anonymous person who posted here and tried to warn you.

If you think your eternal salvation is a joke, OK, you can laugh about it in hell for a long long time.

No matter what happens, America will still be that shining city on top of a hill that the whole world envies. No matter what happens, those idiotic Asians will continue to buy our debt and we will consume and they will produce. It is as easy as that.

If you really think that cycle will go on forever without eventually failing, I have an overpriced condo in Miami to sell you.

You inflation people have everything backwards. The hyper-inflation already happened.

When people like me lived responsibly, others borrowed money they couldn't pay back (read: money created out of thin air by the banks) and used it to consume. This consumption drove up the price of things, like houses but also goods that couldn't otherwise be afforded.

So what now? Fed can lower the rate all they want, it's not inflationary anymore. Liquidity has ceased and people can't spend.

True, some things are going up, but that is a result of the dollar going down. But most everything else is actually in a period of DEFLATION.

In a fractional reserve system, if people don't borrow money, if people can't get the banks to create money out of thin air, there can be no inflation. Got it?

The Fed is powerless to stop it. The whole thing, equities, commodities, housing, it's all going to collapse.

Past history of public bailouts fostered a pattern of reckless behavior. That's simple behavior science that parents with druggie kids know first-hand. If you have a carte blanch guarantee to have your gambling debts paid by the government, and yet you get to take home whatever winnings you can make during the winning streak, wouldn't you gamble with the highest stakes possible? Even at long odds?

"It came from stupid leftist libbies demanding the people with poor credit be given access to loans. As a result people started living far above their means."

What a bunch of tripe.

It was the Bush administration that peddled the "Ownership Society" propaganda. It was the Bush administration that set a goal of 6 million new loans to unqualified minorities. It was the Republican appointed chairman of the Fed that kept rates artificially low. It was Republican puppetmaster Wall Street banks that relaxed their lending standards and sold off crap Subprime mortgages as A rated debt. It was a Republican congress that wrote Glass-Steagall and pushed for two decades of deregulation.

I wonder how many 'Illegal Aliens" are on the "Foreclosure List"?Maybe they can survive using the "Rebate Check" they will be given?I would love to see Ron Paul in a debate with the other candidates and Bernanke,on the "Economy",and how to bring back a "Sound Dollar".I know,I know,only one (1) would show up,that being "Ron Paul".

I think Anon 3:27 meant to say "The borrower becomes the servant of the lender", a quote from the Bible but perhaps because Shakespeare had a hand in writing the King James Bible, he confused the similar language written in both.As to Hamlet, well, let's make him George W. and say "This heavy-headed revel east and west Makes us traduc'd and tax'd of other nations: The clepe us drunkards, and with swinish phrase Soil our addition."- Now that's this administration!

Keith,Your an idiot. This mess was not caused by bankers, it was caused by greedy borrowers. The Fed didn't force any of these borrowers to sign for a mortgage.

Furthermore, Keith, your a naive idiot. A lot of these loans are going into default not because they are unaffordable predatory loans, but rather people are simply walking away from a depreciating asset. Let me guess, the "Tulip Craze" was also Bush's and Paulsens fault?

The problem with people like you is that you like to blame government rather than taking responibiliy yourself.

Who is behind this down turn in the economy in the first place? Who persuaded the banking system to give out loans to those that wouldn't be able to afford them? It was the FED... This my friends is a typical War play... First you 1)Create the Problem, Next you 2)Propose a plan to fix the problem, Last 3)You execute the plan with no mercy...

So, the Federal Reserve, an unconstitutional, and private entity is going to have complete control over the financial system of the United States. I look at this power play as the final straw... Unfortunately our Country is doomed now... We can all say good bye to our financial freedoms. Big Brother will truly be in charge of every dollar in the U.S. Every Bank will be under its tentacles.... Truly Scary

I would love to see Ron Paul in a debate with the other candidates and Bernanke

Ron Paul turn out to be a sissy who lets the corrupt MSM walk all over himself. At least the Clintons have more balls to punch the corrupt MSM and GOP back in the face. Hell, even Chelsea has more balls than Ron Paul by telling that GOP implant to f*ck himself during a debate.

Anderson Cooper treats Ron Paul like trash during a GOP debate at the Reagan Library and Ron Paul gets quiet, doesn't react. You Ron Paul followers should vote for Obama, another lie without passion for the job.